Practical Experience—This Deserves the Maximum Weight of 3

Management competence varies widely depending upon the experience of the CEO. Strong CEOs pick reliable, well-qualified people whom they can trust to accomplish the company’s objectives. Weak CEOs often overemphasize loyalty and try to slot their pals into jobs that they are ill-suited to fill. A frequent error here is to choose the quiet, taciturn intellect, a close friend of the CEO, who has long fancied himself or herself to be a superb marketer. Try not to allocate jobs or expectations of jobs to anyone at this early stage. At most you should “pencil” people into key slots and retain your ability to move people around. This is the last time you will have that flexibility.

In the “virtual” corporation a team’s expertise is cobbled together irrespective of the members’ locations. A virtual group can handle the early stages of planning the enterprise, but once production is set to begin, you need a central location and most of your team needs to be there. Yet virtual enterprises are a permanent fixture of the entrepreneurial landscape. If you have off-site members of your management team, the most important question is whether they are committed to the enterprise. The trap of course is that too many top-drawer executives hedge their bets with multiple commitments, a self-inflicted divide-and-conquer policy that could doom your venture.